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Mercy West announces buyer


Mercy Health Partners has announced its has reached a “definitive agreement” with Health Management Associates, based out of Naples, Fla.

“As a result of the agreement, Health Management will acquire or lease all seven of Mercy’s hospitals, which include a total of 1,323 licensed beds and additional continuum-of-care services,” a press release sent out by HMA stated.

That includes Farragut’s Mercy West Hospital.

“The Mercy system enjoys strong community support with an excellent medical staff and dedicated employees. Health Management intends to build upon this solid foundation and continue to enhance the quality of health care, increase the range of services and improve access to needed medical services for East Tennessee,” said Gary D. Newsome, president and CEO of HMA, in the release.


The definitive agreement was reached after more than a year of searching and negotiating with potential buyers for the Mercy system.

The purchase price for the system is expected to be about $525 million, plus “adjustments for working capital and the assumption of certain long-term lease liabilities.”

The acquisition is subject to review by a number of authorities, including the Vatican, but still is expected to be completed by Oct. 1.

Jeffrey A. Ashin, president and CEO of Mercy Health Partners, said, “Health Management is the clear choice for Mercy due to their understanding of and commitment to Mercy’s mission and values and the company’s success in partnering with not-for-profit, Catholic hospitals, like Mercy, in the past.

“[HMA] will allow Mercy to build on its strategic plan, maintain its mission and continually improve upon its quality, financial position, services and facilities,” he added.

According to Ashin, the hospitals’ day-to-day operations would remain largely unchanged.

“Patients will continue to receive the high quality care they are accustomed to. Physicians will benefit from the large network and increased capital commitment,” Ashin said.

While Ashin said in a statement there would be no change in medical staff status and that he did not anticipate service closures, he said he did anticipate significant financial changes.

“An estimated $4.5 million in new state and local tax revenues annually will be generated by the change in status of the hospitals to tax-paying organizations,” he said.

“Through Health Management, the hospitals will be able to invest in their facilities and new technologies, and provide the training needed to ensure the best, most current care is available in our community,” he added.

The Mercy name also will change.

“Health Management is currently conducting community focus groups across a broad spectrum of audiences and working collaboratively with Mercy leadership and others to identify a new name,” Ashin said.

Catholic Diocese of Knoxville Bishop Richard F. Stika welcomed HMA in a statement.

“We are grateful that the system, which began with a single hospital founded 81 years ago by the Sisters of Mercy to fulfill their mission here in our city, will continue to exist,” he said.

HMA owns and operates 59 hospitals in 15 states.

 

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